Partly paid securities, or instalment receipts, are securities that require that on a future date or dates to be specified by the issuer, that the holder may have a legal obligation to pay the balance of the previously uncalled issue price.

The ASX, the market supervisor, and the Australian Securities and Investment Commission (ASIC), the market regulator, put forward a market rule change to insert a new definition of a partly paid security and impose a new requirement for market participants and retail investors to enter into a Partly Paid Security Client Agreement before the retail client buys partly paid securities for the first time.

"The Government shares the concerns of ASIC and the ASX that retail investors have not fully understood their potential obligations with regard to partly paid securities."

"A falling sharemarket this year has meant that some securities that looked like a bargain actually had huge liabilities attached to them that were not understood by retail investors who purchased them."

"Today's announced rule changes will greatly assist in ensuring retail investors more fully appreciate the implications of this type of security, and that aligns with the Government's overall focus on market integrity," said Minister Sherry.

These changes to the ASX market rules were lodged with the Government on Friday, April 3. Under the Corporations Act 2001, the Minister has 28 days to choose whether the rule changes should be disallowed. The Minister has chosen not to disallow these rule changes.